Rural banks beaten by Odette could tap into P10B Landbank program

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Rural banks beaten by Odette could tap into P10B Landbank program

Official photo of LANDBANK

MANILA, Philippines—Struggling rural banks in six regions hit by Typhoon “Odette” late last year could seek help from the new 10 billion peso facility from the Land Bank of the Philippines (Landbank ).

The loan program, called Rehabilitation of Rural Financial Institutions and Support to Areas Affected by Typhoon Odette (CFI-RESTORE), will finance permanent working capital and capital expenditures.

It includes the repair and rehabilitation of buildings and facilities and the repair or purchase of equipment damaged or destroyed by Odette, state bank Landbank said in a statement Sunday (July 17).

This facility “can also be used to supplement funds from rural financial institutions to lend to typhoon-affected sub-borrowers,” Landbank said.

Landbank is targeting assistance to rural, savings and cooperative banks in areas covered by state of disaster declarations in effect until December 2022.

These regions are Mimaropa, Western Visayas, Central Visayas, Eastern Visayas, Northern Mindanao and Caraga.

“CFI-RESTORE will also reach out to rural financial institutions in areas placed in a state of calamity by their respective local government units (LGUs),” Landbank added.

Qualified rural lenders can borrow up to 85% of their ongoing capital and investment expenditure needs. For agricultural loans from sub-borrowers, borrowers could request coverage of up to 90% and 85% for non-agricultural loans.

“Rural financial institutions with existing loans can also benefit from loan restructuring under the program to rehabilitate and restore their operational cash flow, via an extended repayment period,” Landbank said.

CFI-RESTORE will charge interest of 4% per year, fixed for the first three years, after which it will be subject to repricing. Landbank said working capital loans will be repayable for up to three years and 10 years for capital expenditure loans and rediscounting term loans.

“Faced with the unprecedented financial challenges caused by the calamities, Landbank is ready to help rural financial institutions maintain their operations,” said Cecilia Borromeo, President and CEO of Landbank.

“This is part of our commitment to advancing local recovery and helping build more resilient communities nationwide,” Borromeo said.

TSB

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